Northwood Hospitality Failed to Send COBRA Notices to Former Health Plan Participants, Lawsuit Alleges

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A proposed class action alleges the operator of a handful of hotels and resorts in California, Florida, North Carolina and other states has failed to provide certain former health plan participants with notice of their right to continued insurance coverage.

According to the 14-page case, the failure of Northwood Hospitality LLC, whose properties include The London West Hollywood at Beverly Hills, The Darcy in Washington, D.C., and Amara Resort in Sedona, Arizona, to provide qualifying individuals with notice under the Consolidated Omnibus Budget Reconciliation Act (COBRA) has deprived them of “the opportunity to make an informed decision about the healthcare options for themselves and their families.”

The lawsuit explains that the sponsor of a group health plan normally employing more than 20 employees is required to provide each beneficiary who would lose coverage under the plan as a result of a qualifying event, such as a separation from employment, of their right to elect to continue insurance coverage. Per the suit, COBRA notice is of “critical importance” given workers are not expected to know about their right to continue their health insurance after experiencing an event that would otherwise end their coverage.

Further, the case relays that in order to facilitate COBRA compliance, the U.S. Department of Labor has issued a model COBRA notice that contains all of the legally required information that must be shared by an employer, such as the identity of the plan administrator, an explanation for how to elect continuation coverage, a description of the available coverage, the amount of time coverage will be available, the amount it will cost, and other critical details.

The lawsuit alleges that Northwood Hospitality has refused to use the DOL’s model COBRA notice or otherwise issue any such notice to qualified individuals.

The plaintiff, who worked at one of Northwood Hospitality’s Florida properties before she voluntarily resigned in September 2021, alleges that in the seven months following her separation from employment, she never received a COBRA notice, let alone one that contained all of the legally required information.

Per the suit, the defendant’s failure to send the plaintiff and similarly situated plan participants proper COBRA notice has caused them to lose their health insurance coverage and, in some cases, incur unpaid medical bills. 

According to the suit, Northwood Hospitality’s hotels and resorts include:

• The London West Hollywood at Beverly Hills in West Hollywood, California;
• Cheeca Lodge & Spa in Islamorada, Florida;
• Morada Bay Florida Keys;
• Naples Grande Beach Resort in Naples, Florida (formerly known as Waldorf Astoria Naples);
• Tranquility Bay Resort in Marathon, Florida;
• The Darcy in Washington, D.C.;
• Amara Resort in Sedona, Arizona;
• The Ballantyne Hotel & Lodge in Charlotte, North Carolina;
• Aloft Charlotte Ballantyne in Charlotte, North Carolina;
• Courtyard by Marriott Charlotte Ballantyne in Charlotte, North Carolina;
• Staybridge Suites Charlotte in Charlotte, North Carolina; and
• Planters Inn in Charleston, South Carolina.

The lawsuit looks to represent all participants and beneficiaries in the defendant’s health plans who were not sent a COBRA notice by the company during the applicable statute of limitations period after experiencing a qualifying event, as determined by Northwood Hospitality’s records, and did not elect continuation coverage.

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